Monday, July 30, 2012

Part two of the accountant-cy piece will have to wait. The accounting firm I contacted has yet to reply, so I'll have to find a different one. Pity, as the website for the one I contacted made them sound competent.

Dominic Tarason wrote a flattering piece on NEO Scavenger's upcoming combat and wound features. It's been about four months since NEO Scavenger made waves in the news, and I was getting ready to promote the upcoming build to some news outlets. Quite a lot has changed in the game since the last round of news, so I'm hoping folks who were on the fence might be ready to become supporters.

As with the last round, the news found me first. I guess I have a new-found reason to get that wound feature finished asap!

Desura

What's more, I received an email from a game manager at Desura, indicating they'd be interested in carrying NEO Scavenger. Cool!

Desura was a service I planned on approaching, but I figured I'd have to wait until closer to launch. Their howto page indicates that the game must be within a month of launch, which is probably not true for NEO Scavenger. I've been pushing NEO Scavenger's release date out as funding permits, adding new features and releasing new builds for supporters as I go.

Desura's alpha funding initiative, however, may make it possible to publish through them sooner than expected. This, of course, opens up a whole new series of questions, such as:

Downloadable Version - Desura supports titles for PC, Mac, and Linux. Since NEO Scavenger is a Flash game, what's the best way to prepare clients for each platform?

DRM - So far, NEO Scavenger has a type of DRM in that one must be logged into bluebottlegames.com with a valid account to play the beta. However, I'm a fan of GOG's no-DRM policy, and eventually plan to migrate to a downloadable client without DRM. Is now the time?

Revenue Changes - Will anything change if revenue suddenly increases? There's no guarantee that a new sales channel will yield significant new revenue. But what if it does? Will NEO Scavenger scope increase? Should I keep scope small, and use the additional revenue towards future titles? It'd be worthwhile to answer this question now, while I'm sober.

Cross-Channel Access - What about players who already purchased beta access. Is there a way for me to tie their purchase at bluebottlegames.com to Desura, so they can access both equally?

Exciting times, to be sure. There's never a shortage of unknowns in this business!

Monday, July 16, 2012

I've been keeping a growing list of accounting questions since starting Blue Bottle Games. Mainly, they're questions that didn't need answering immediately, but soon. I've finally reached a critical mass, and figured it was time to start seeking those answers.

As usual, I figure other indies will probably run across similar questions in their adventures, so I'll be sharing my findings.

I've reached out to a local accounting firm to see if they'll sit down with me for an hour (or less) to go over my questions. As such, many of these questions' answers will have to wait until a future post.

However, two questions have already been answered by my payment provider, FastSpring.

Payment Providers & Taxes

My province (BC, Canada) has a sales tax (GST), and I was wondering if FastSpring handles that tax, if I must pay that tax, or if it is not an issue?

Also, regarding tax reporting, will FastSpring send me tax forms at the end of the year, or am I required to send tax slips to FastSpring? If so, which forms? (This second one was prompted when I learned that businesses must prepare tax slips for services they contract. I wondered whether FastSpring was therefore considered a contractor, since they take a percentage of each sale, and that might be considered payment.)

As usual, FastSpring was quick to respond, and the answer was better than I expected:

Technically FastSpring is a reseller. This means payment we send you are for wholesale sales, and we become the retailer. As such, sales tax would become purely our responsibility. Current laws between the US and Canada do not require collection of GST on sales of digital goods by US retailers, so no GST will be collected, and you don't need to and can't charge it on sales through FastSpring.We won't send or don't need any tax related docs with you, and you should simply claim payments we send to you as "wholesale sales".

Getting this answer only reinforces my feeling that indies should find a good payment provider if possible. Having an expert handle not only the prospects of customer payment and security, but also international sales tax and VAT has been a huge weight removed from my shoulders.

I'll list the rest of the questions here, even though I have no answers yet. Once I've spoken with an accountant, I should have some more info to share. Without further ado, the questions.

Taxes

To whom do I pay taxes? CRA or IRS? I'm pretty sure this is the CRA, as it would be with regular income, but I might as well ask the expert.

Do I need to pre-pay or withhold any taxes this year? I know I've heard somewhere that self-employed-types are expected to withhold and pay taxes during the year, so I want clarification.

Business Expenses

Should I back-pay myself for work done between the day Blue Bottle Games was started to the first day of customer sales? There's about a three-month period during which BBG was active and a fully-registered sole proprietership accruing expenses before I received any sales income. While I of course would like to be paid for that period, I want to know if start-ups usually do this or not. My hunch is that they do, and this is just a line-item in the "accounts payable" for the company until it can afford to settled the debt.

Should I back-pay myself for work done on NEO Scavenger before 2012? I was working on the game before BBG became a company for almost seven months. Should I back-pay this effort as well? This is a bit trickier, since I was technically not allowed to be employed in Canada until December 2011. I may have to write that off as volunteer work.

What should I do about paying myself during the period before BBG can afford to pay my salary? This is related to the question above. BBG is making some money, which is deposited into a bank account. Should I be paying myself out of that account right away? Should I wait until BBG is in the black? Since BBG and I are essentially the same tax entity, it's not a question of taxes as much as just general good accounting practice.

Should I deduct home office space on my taxes? I've heard a number of people (whom I trust) say "yes" to this, particularly if I'm careful about realistic claims. Still, while I have an accountant captive, I might as well ask. Particularly since the office is just another room in our apartment, and gets used for other things (especially during evenings and weekends).

Can I deduct any other expenses? Like with the office above, there are some things I'm considering purchasing which have simultaneous use for both work and play. (e.g. an android tablet, video games, pc hardware) Can all or a portion of these items be considered business expenses, if they are used for pleasure some of the time?

Volunteers and Employees

How do I account for volunteer/unpaid help? I've had some design help and forum moderation help which was voluntary, and I want to make sure there are no tax reporting needs I'm missing.

Is there any limitation on who can work for me, in terms of their location and visas? I want to know if there are any restrictions on my hiring or accepting volunteer help from foreign workers or companies.

US Presence

Should I establish a US subsidiary? Normally, this would seem unnecessarily complicated. However, some services will only work with a US company. (e.g. Kickstarter, Amazon and Google payments, etc.) Is it worth my setting up a US branch to take advantage of these services?

Government Programs

Are there any provincial or federal business programs I should be participating in or applying to? Since I'm not employing anyone nor creating any jobs, probably not. However, there may be programs to support entrepreneurs in my area, and it's worth asking.

GST/HST

Do I need to register for GST? Even though I trust FastSpring on this, I figure I might as well ask the accountant while I've got them.

Hopefully, these are questions I can knock-off in a single sit-down with an accountant. I'll be sure to share once I get some more info!

Sunday, July 1, 2012

I'm on vacation this week, so Monday's regularly-scheduled blog post will be interrupted. So I figured I'd post tonight instead, and mention a few things that have been on my mind lately.

Atrophy

I've been starting to feel some physical effects from working at home, at the computer. I've been spending 12 or more hours at the computer each day (between work and play), and I feel like it may be taking a toll on my body.

Two weeks ago, I was talking with Rochelle about work schedules, and the topic of non-standard work weeks came up. I remembered some folks actually work an extra hour Monday-Thursday, work normal Fridays, and take every other Friday off.

That's a neat idea, in theory, but I have a problem...

I Am a Workaholic

I ended up working the second Friday anyway. With this vacation coming up, it was easy for me to justify it as getting some work done before logging off for a week. I even worked a few hours on Saturday. I wanted to get a build out to my customers with the new combat features before I left, but it just didn't work out.

Instead, I worked so hard for two weeks that by Saturday, I was actually starting to get sick of working. That's a first, or at least a rarity, for me. I was starting to lose drive to work on things, and my creativity. I think I might've burnt myself out.

Step Away from the Computer

Getting away for a week, out in the woods, is probably exactly what I need. Force myself away from the computer. Get some sun. Chop some wood. Soak in the warmth of a campfire. Drink some beer.

When I get back, I think it's time to seriously consider running again. It's been over 6 months since I last ran. The rain makes it tough, but I think the rainy season is supposed to end soon, so it's probably time to start an exercise routine.

And I need to scale back to 40-hour work weeks again. I may still try for the 9-hour days with alternate Fridays off. Having the occasional 3-day weekend will be a nice way to relax the inevitable weekend rush to do chores, errands, and still fit in some fun.

So anyway, be on the lookout for that if you work alone and/or from home. This situation is one I didn't expect to happen to me, and it sort of snuck up. Too much work ethic can often be as bad as too little.